February 16, 2006

A few predictions from those in the know

OK, a bit of a brain dump from several sessions: 1. An interesting session from Gartner just now on ‘disruptive forces impacting the global sourcing market’ - talked about some of the well known issues like wage inflation, but with some interesting conclusions. By 2008, prediction is that Indian labour rates will rise by 35% to 60% compared to current rates, but the differential in pricing in low cost supply regions, like India will still be a key factor in 70% of all deals made. Scarcity and diversity of skills will become more of an issue as will the availability of ‘localised’ or resident workforce. They also reckon that 30% of the ‘world’s most influential CEOs’ will be outside of the US.

2. Aaron McCormack from BT reckons the ideal CIO in 2010 will need to be able to predict the ‘don’t know you don’t knows’ to badly quote the already gramatically-challenged Donald Rumsfeld - in other words they need to focus far more on actively assisting the CEO with predicting trends, setting the agenda and working with the business, not just in support of it. OK but that type of CIO does exist today.

3. A rich session from Paul Coby, CIO of BA with some interesting stats pointing to the importance of India and the continuation of growth - there will soon be 42 services a week by BA to India including 14 each to Delhi and Mumbai, 6 to Chennai (second busiest destination behind only the US I think, although don’t quote me); they plan to be a ‘100% e-ticket airline’ of which 50% will be self service’ (incidentally, Tom Friedman made an interesting comment yesterday on the rise of self-service check-ins: ‘by checking in on-line and printing your own boarding pass, you’ve become an airline employee. In fact you’re paying them for the privilege of being an employee’). IT investments at BA are up 40%, yet the operational cost of delivery is down 40% thanks to the outsourced model.

My other observations on the second day: Saurabh Srivastava is a true elder-statesman in the Indian IT services industry and commands immense respect from all who know him, and that’s a lot of people from what I’ve seen over the last couple of days! Happy Retirement Saurabh, but glad you’ll be continuing to play a role in Xansa’s future as Honorary President of India.